Railways cutting passenger services

VILNIUS - The Lithuanian national railway company Lietuvos Gelezinkeliai is set to close certain unprofitable passenger services and reduce the number of passenger trains on some local routes by April, saying that it is no longer able to serve as a welfare carrier.

The number of trains running in Lithuania will be cut to 167 from the current 194 in late March.

"Losses from passenger service are covered by profits from freight traffic. Therefore we are forced to raise freight transportation tariffs. We are losing competition with the more flexible road carriers, most of which are in private hands," Jonas Birziskis, Lietuvos Gelezinkeliai's managing director, said in a news conference on March 13.

Lietuvos Gelezinkeliai posted a profit of 95 million litas ($23.75 million) from freight services last year but lost 86.9 million litas from passenger transportation.

Lietuvos Gelezinkeliai managers said the worsening condition of tracks was also causing a great deal of concern for the company.

"The country's railway infrastructure upgrades would require around 1 billion litas. We are forced to limit the speed of trains because of the bad condition of tracks. Trains run at a speed of between 15 kph and 40 kph in certain sections already," Birziskis said.

According to preliminary data, the company posted an unaudited net profit of 1.6 million litas for 2000, compared with a loss of 52.6 million litas in 1999. Passenger traffic declined by 23.2 percent, year-on-year, to 8.9 million in 2000.

The government plans to restructure Lietuvos Gelezinkeliai by decentralizing its management and allowing a number of separate railway companies to operate in the market, with some of them likely to be privatized by mid-2003. The infrastructure would remain in state hands, while the rolling stock assets would be privatized.